Markets Overview: (Source: Bloomberg, FT, Reuters, DJ Newswires)

UK 100 Index called to open -15pts at 7230, just about hanging onto rising support from late April. With yesterday’s high confirming falling highs since mid-April, this means we sit in a 3-week narrowing pattern. Having entered from the north, from 7400, this suggests it is bearish and could take us back to 7100. Bulls need a break above 7240 to engineer a bounce. Bears want a breach of 7230 to kick off a breakdown. Watch levels: Bullish 7240, Bearish 7230.

Negative sentiment has perhaps been tempered by Trump claiming a small victory in getting his healthcare bill through the House of Representatives (just; tight vote). While this is a step towards tax reform and other stimulus, Senate approval is sure to prove tricky and could prove a bridge too far in terms of concrete legislative approval for the new President.

With Japan closed, and the US finishing pretty much flat, the only real driver from Asia is an understandably down day for Australia’s ASX which has seen its Energy contingent hurt by the oil price decline with a knock-on to the Miners already smarting from major China-inspired weakness for Copper and Iron Ore, although precious metals have found some support after their sell-off as investors get nervy.

With Japan closed, the only real driver from Asia is an understandably down day for Australia’s ASX which has seen its Energy contingent hurt by the oil price decline with a knock-on to the Miners already smarting from major weakness in key metals like Copper and Iron Ore, although precious metals have found some support after their sell-off as investors get nervy.

US indices were virtually unchanged on Thursday as the energy sector weighed on sentiment, while investors await today’s all-important US jobs report. The Dow Jones closed just shy of breakeven with Caterpillar, Chevron and ExxonMobil contributing the most losses. Both the S&P500 and the Nasdaq, however, closed marginally higher, with Consumer Staples names helping the former outperform its peers despite aforementioned Energy sector weakness.

Crude Oil has suffered significantly overnight, with global benchmark Brent Crude falling below $50 a barrel and its US counterpart below $45 for the first time since November’s OPEC production cut agreement. This on rising concerns that firstly, members and non-members may not agree to extend the deal at all when they meet later this month and secondly, that the parties may fail to increase the depth of production cuts. Both benchmarks, however, have rallied around $1 from overnight lows as bargain hunting enters the marketplace.

Gold price has been a beneficiary of a weaker US dollar overnight, as the global reserve currency fails to gain momentum to engineer a recovery from fresh 6-month lows. The precious metal now faces a hurdle of $1235 resistance in order to maintain its recovery from 6-week lows, although may benefit from a potential bullish flag pattern to just below $1240.

In focus today is this afternoon’s US Jobs report and the closely watched US Non-Farm Payrolls print, considered a barometer for US growth. Any upside or downside surprise for NFP, or indeed the unemployment rate or wages growth, could yet influence how many more US Fed rate hikes investors expect between now and year-end. This could impact share prices of Banks (beneficiaries of higher rates) and move the US Dollar, with a knock-on for commodity prices, the UK Index and DAX. Since Wednesday’s hawkish Fed update markets have already increased their certainty of a June hike to 90%. Will today’s data see this tighten further, or ease back?

Any more polling updates for Sunday’s French Presidential second round run-off between far-right Marine Le Pen and independent centrist Emmanuel Macron will offer a last chance to position oneself. After all the result could prove as pivotal for Europe as last summer’s Brexit referendum, giving rise to some significant moves in currencies (especially the Euro), equities, indices (CAC & DAX), commodities and bonds.

Continuing the political theme, incoming results from the UK local elections will provide an interesting insight into next month’s general election, with early indications showing the Conservatives doing well (as expected) but Labour not performing quite as badly as had been expected, while the Lib Dems fail to capitalise on Tory Remainer defections and UKIP support all but diverted to the ruling party now flying the banner for Brexit.

Speakers are in plentiful supply with the EU’s Juncker just after the European open, Tusk just before the US jobs report and Barnier just after. After the European market close, prepare for a 2hr Fed marathon with Fischer, Williams, Rosengren, Evans, Bullard and Chair Yellen all on the roster.

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UK Company Headlines: (Source: Reuters/DJ Newswires)

• Pearson launches new cost – cutting drive, may sell K12 business
• Marks & Spencer names industry veteran Archie Norman as chairman
• Cobham says 98% of new shares taken up in rights issue
• BA – owner IAG posts operating profit, revenue ahead of expectations
• IAG Q1 operating profit before exceptional items rises to €170m
• Easyjet April passengers rise 11.7% to 7.1 million
• BBA says LFL revenue up 2% for period ended April 30
• IHG Q1 global comparable rooms revenue rises
• Intercontinental hotels group's Richard Solomons to retire as CEO
• Goldman's Blankfein says London could stall due to Brexit – BBC
• Smith & Nephew Q1 revenue rises 3% on underlying basis
• Lloyds' MBNA acquisition avoids in – depth UK competition probe
• Highland Gold says total ore reserves estimates at MNV increase to 500,400 oz
• Oil prices continue slide; WTI nearing 6 – month low as supply glut weighs
• Gold edges up, but set for worst week since November